Here’s a look at some of the week’s biggest movers in biotech, what’s moving them, and where we expect things to go early next week and beyond. The two companies we are focusing on are Neurotrope Inc (OTCMKTS:NTRP) and PTC Therapeutics, Inc. (NASDAQ:PTCT).
So, first, let’s look at Neurotrope.
This one is moving on nothing more than speculation, but it’s well worth a look nonetheless. The company has gained close to 8000% year to date (yes, that’s three zeros) despite having put out very little in the way of fundamental operational updates. It’s got an exploratory Alzheimer’s study underway, and it’s in this study, and specifically, speculation as to its outcome, that the movement we’ve seen is based.
The drug that underpins the trial in question is called bryostatin. As mentioned, it’s an Alzheimer’s asset, and the phase is a phase II study. Many reading will be more than aware that Alzheimer’s is an incredibly difficult thing to treat. There have been countless failed assets in this space to date, and that markets are loading up in anticipation of some positive data from this one seems a little ill informed. That the company is taking a different approach to most others have done makes it a little different than just blindly following a company into a phase II outcome, but not much.
Anyway, the data is set to hit press early in April (a little later than initially planned) and buyers are loading up in anticipation of the numbers pointing towards some degree of clinical benefit in patients at the severe end of the scale.
The trial is set up to pitch bryostatin against placebo, with an endpoint of progression severity as measured using an industry standard scale.
From a forward perspective, the key thing to understand here is that if the company can show some degree of clinical benefit for bryostatin in Alzheimer’s, if it’s just non progression, or even slower progression than placebo, then the upside action seen year to date is only the beginning. That said, the same is very much true in reverse. If bryostatin shows no discernible difference from placebo in the study, or if it’s worse in terms of progression severity, then Neurotrope is likely set to give back all of the gains it has made this year to the market, and perhaps more, very quickly.
It’s a classic biotechnology binary outcome trade. Plenty of reward on offer, but if the data comes out against expectations (or perhaps it’s more accurate to say in line with expectations in this instance) then there’s an equal or larger risk.
So, moving on to PTC, this one’s not so straightforward.
The company just announced that it has acquired all rights from a company Marathon Pharmaceuticals, to Emflaza (deflazacort) for the treatment of Duchenne muscular dystrophy (DMD) patients five years and older. Some readers may remember this one from earlier in the year – the FDA approved it back in February for the treatment of DMD sufferers, and the approval was initially seen as game changing for the kids with this debilitating condition.
Then marathon put an annual price tag on it of $89K, and things started to fall apart. The political environment is not suited to high prices, and add the fact that this is one of the only available treatments in an indication that affects children, and it became a real sticking point for the company.
Well, PTC has now bought the drug from Marathon, and chances are it’s going to have to lower the price dramatically if the company is going to avoid the storm that surrounded Marathon at launch. Additionally, the drug is available as a generic outside of the US at around one tenth the Marathon cost, and there’s debate as to whether it even requires approval in the US to be sold in tis indication.
In other words, PTC might well be left holding the bag here, with a drug that can’t be sold, or can’t be sold under patent protection at least, and that if it can, is going to have to be sold incredibly cheap.